United States Court of Appeals
For the First Circuit
No. 01-2058
ISRAEL SOTOMAYOR VARGAS, ET AL.,
Plaintiffs, Appellees,
v.
GEOLOGISTICS AMERICAS, INC., ET AL.,
Defendants, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. José Antonio Fusté, U.S. District Judge]
Before
Selya, Circuit Judge,
Coffin, Senior Circuit Judge,
and Lipez, Circuit Judge
Ariadna Alvarez, with whom Francisco Chevere, McConnell
Valdes, Rafael E. Aguilo-Velez, and Schuster, Usera, Aguilo &
Santiago were on brief, for appellants.
Jorge Carazo-Quetglas, with whom Toledo Toledo & Carazo-
Quetglas, P.S.C. was on brief, for appellees.
April 1, 2002
COFFIN, Senior Circuit Judge. Plaintiffs-appellees are
former employees of Lep Profit International, Inc. (“Lep
Profit”), which had been sold and became Geologistics Americas,
Inc. (“Geologistics”). They brought suit in the Puerto Rico
Court of First Instance charging that Geologistics, Caribbean
Transportation Services, Inc. (“Caribbean”), Federal Express
Corporation (“FedEx”), Teamsters Union of Puerto Rico, Local 901
(“Union”), and José Cádiz, an official of the union, had
terminated their employment in violation of their collective
bargaining agreement ("CBA") and had interfered with their
contractual rights. No law, federal or Puerto Rican, was cited
in the complaint; the only reference was to “the applicable
labor laws.” Defendants were successful in removing the case to
federal district court, the court agreeing that the complaint in
substance alleged violations of Section 301 of the Labor
Management Relations Act, 29 U.S.C. § 185, Section 9 of the
National Labor Relations Act, 29 U.S.C. § 159, the Railway Labor
Act, 45 U.S.C. § 151, and Puerto Rican contract and tort law.
Defendants then moved to dismiss the complaint on
statute of limitations grounds, arguing that the complaint,
which charged the defendant companies with breaching the CBA and
the union defendants with breaching their duty of fair
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representation, constituted a hybrid Section 301/fair
representation suit. Accordingly, the appropriate limitations
period, under DelCostello v. Int’l Bhd. of Teamsters, 462 U.S.
151 (1983), was six months. The CBA had a termination date of
January 7, 1999. Any dismissals in violation of the CBA had to
have occurred prior to that. And, since the complaint had not
been filed until one and three quarters years later, on
September 1, 2000, defendants argued that the suit was untimely.
Plaintiffs responded, not contesting that the complaint
contained a time-barred hybrid claim, but instead urging that
there were several unidentified state causes of action. They
asked the court to retain supplemental jurisdiction or remand
the case to the Puerto Rican court. Defendants opposed both
requests, arguing that the facts alleged in the complaint
described a matter completely preempted by federal law. The
district court dismissed the federal claims as time-barred,
declined to exercise supplemental jurisdiction over the state
law claims, and remanded the case to the Puerto Rico Court of
First Instance without reaching the issue of preemption. It
subsequently denied without comment defendants’ motion to
reconsider. The defendants appealed.
The substantive issue before us on appeal is whether
any state claims contained in the complaint survive the powerful
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preemptive force behind Section 301 and the allied fair
representation provisions of the National Labor Relations Act.
As the Supreme Court has noted:
[T]he pre-emptive force of § 301 is so
powerful as to displace entirely any state
cause of action “for violation of contracts
between an employer and a labor
organization.” Any such suit is purely a
creature of federal law, notwithstanding the
fact that state law would provide a cause of
action in absence of § 301.
Caterpillar, Inc. v. Williams, 482 U.S. 386, 393 (1987) (quoting
Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S.
1, 23 (1983)).
In BIW Deceived v. Local S6, 132 F.3d 824, 831 (1st
Cir. 1997), we noted that duty of fair representation
"preemption operates in much the same fashion as section 301
preemption.” And in Magerer v. John Sexton & Co., 912 F.2d 525,
531 (1st Cir. 1990), we applied the same test to state claims of
tortious interference with contractual relations.
The Court has also laid down guidelines for determining
when complete preemption is triggered. In Caterpillar, 482 U.S.
at 394, it said, “Section 301 governs claims founded directly on
rights created by collective bargaining agreements and also
claims substantially dependent on analysis of a collective
bargaining agreement.” Moreover, it held that
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[o]nce an area of state law has been
completely pre-empted, any claim purportedly
based on that pre-empted state law is
considered, from its inception, a federal
claim, and therefore arises under federal
law. . . . The complete pre-emption
corollary to the well-pleaded complaint rule
is applied primarily in cases raising claims
pre-empted by § 301 of the LMRA.
Id. at 393; see also Beidleman v. The Stroh Brewery Co., 182
F.3d 225, 237 (3d Cir. 1999).
If, then, the state claims are completely preempted by
federal law and no cause of action survives for consideration by
the Commonwealth court, remand to that court would be improper.
See St. John v. Int’l Ass’n of Machinists and Aerospace Workers,
139 F.3d 1214, 1218 (8th Cir. 1998). The task before us is to
review the arguments of plaintiffs-appellees in the light of the
allegations of the complaint to see whether any state law claims
are founded on the CBA or involve interpretation of the CBA.
Appellees advance four propositions. Each deals with
a separate basis for avoidance of preemption. The first
concerns a state claim of tortious interference with contractual
relationships. This claim is leveled at Caribbean and FedEx.
In their brief, appellees describe Caribbean and FedEx as third
parties, not parties to the CBA, who carried out a deliberate
strategy to terminate plaintiffs’ employment so that, after such
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termination, they could accomplish the sale of Lep Profit’s
assets to themselves.
Whatever might be the preemption survival potential of
such a claim, it bears no resemblance to what appears in the
complaint. In the complaint, there is no allegation that
Caribbean and FedEx engaged in any action before they became, as
successors to Lep Profit, parties to the CBA. On the contrary,
paragraphs 40, 41, and 42 link together Geologistics, Caribbean,
and FedEx as having acquired Lep Profit’s assets and liabilities
and as having assumed all of Lep Profit’s contractual
obligations. Furthermore, in paragraph 44 it is specifically
alleged that all three successors violated the CBA at the time
of the termination of plaintiffs’ employment.
At oral argument, appellees’ counsel, confronted with
the allegations of the complaint, said that the complaint must
be read liberally, that there may be other information in the
background, and that there had been no discovery. But this is
not a situation where only minor facts or inferences need be
supplied. A “liberal” reading would in effect substitute
entirely different allegations. As for the absence of
discovery, we note that no Rule 56(f) request for additional
time in which to conduct necessary discovery seems to have been
made.
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Appellees’ second claim is directed at Geologistics,
alleging the breach of an agreement wholly independent of the
CBA: a letter to employees dated August 27, 1998. In paragraph
34 of the complaint, this letter is alleged to have announced a
name change, from "Lep Profit International" to "Geologistics
Americas, Inc.," and to have added that this was only a change
in the name and that “the continuity of the acquired rights was
guaranteed.” How such a unilateral, gratuitous, unbargained-for
message, confirmatory of and founded on CBA rights, can be
considered an independent agreement sufficient to escape Section
301 preemption escapes us.
Appellees’ third claim is directed at the union.
Paragraphs 35 and 36 allege that on September 15, 1998, it
entered into a “Closing Agreement” with Lep Profit, which “was
meant to leave without effect” the CBA. It seems unarguable to
us that such a claim would necessarily involve ascertaining what
rights the CBA had contained in order to know how the Closing
Agreement had compromised them or rendered them to no effect.
Appellees’ only rejoinder is to cite a Puerto Rico Supreme Court
case, Rivera v. Security Nat. Life Ins. Co., 106 D.P.R. 517
(1977). The issue there was whether Puerto Rico had an
appropriate compensatory remedy in place to supplement the
remedy expressly provided by the federal law. The Rivera court
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merely assumed for argument’s sake the permissibility of such a
state law remedy, but it found no such remedy in place. It
therefore made no decision as to whether federal preemption
would apply in a proper case.
Finally, appellees claim that they are entitled to
severance pay in accordance with Law 80 of May 30, 1976, 29 P.R.
Laws Ann. § 185. This law mandates some compensation in the
event of employment termination "without just cause." But a
determination of just cause presupposes an analysis of the
rights and duties imposed by the CBA. Moreover, even in the
event that a termination found not to be in violation of the CBA
could otherwise be adjudged without just cause under Law 80, the
uncertainty caused by the application of two systems of law
would undermine the policy of uniformity in labor law
administration. See Beidleman, 182 F.3d at 231-32. We
therefore hold that all claims in the complaint are preempted by
federal labor law.
The district court’s order remanding the state law
claims is vacated. The district court shall enter judgment for
the defendants on all claims asserted in the complaint.
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